Energy efficiency strategy, standards and investment

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Paris alignmentReasoning
UnalignedWhile KDB has no institution-wide energy efficiency policy, its Sustainability Bond Framework sets out standards for energy efficiency. However, the share of its issued Sustainability Bonds equals only 0.1% of its entire portfolio.
Overarching energy efficiency first strategy/principle
There does not appear to be an overarching energy efficiency strategy/principle.
Transport energy efficiencyBuilding energy efficiencyFinancial intermediary energy efficiency
The KDB Sustainability Bond Framework defines eligible transport criteria for low-carbon transport options, including electric cars, electric rail and non-motorised options. However, the share of its issued Sustainability Bonds equals only 0.1% of its entire portfolio.The KDB Sustainability Framework defines eligible investment for the Sustainability Bond Framework as projects having at least 30% energy savings. However, the share of its issued Sustainability Bonds equals only 0.1% of its entire portfolio.There is no information on financial intermediaries.

Explanation

KDB does not have any institution-wide requirements for energy efficiency. However, its Sustainability Bond Framework from 2019 sets out some good standards for energy efficiency standards for energy generation, buildings and transport. In 2019, KDB issued its first Sustainability Bond worth KRW 400 billion (~$360 million). This corresponds to 0.1% of its total assets.

Transport

The Sustainability Bond Framework defines “low-carbon transportation including electric or hydrogen-powered cars, electric-powered rail, non-motorised, multi-modal transportation and the related infrastructures” as eligible for investment. On maritime vessels, the framework defines emission reduction targets of at least 40% until 2030 as condition for any investment.

Buildings

The Sustainability Bond Framework defines energy storage systems, smart grids, and appliances as eligible for investment which result in a reduction of energy consumption by at least 30%. The second party opinion by Sustainalytics has identified this standard to be in compliance with the LEED gold standard for sustainable buildings.

Recommendation: KDB should apply its Sustainability Bond Framework for its entire operations.

Last Update: July 2021